Synchrony Financial (SYF) 24 Oct 232023 Q3 Earnings call transcript

[Audio Gap]

As actual results to differ materially in our SEC filings, which are available on our website.

During the call, we will refer to non-GAAP financial measures in discussing the company's performance.

You can find a reconciliation of these measures to GAAP financial measures in our materials for today's call.

Finally, Synchrony Financial is not responsible for and does not edit or guarantee the accuracy of our earnings teleconference transcripts provided by third parties -- only authorized webcast are located on our website.

morning and Doubles, President Brian Financial this Chief President and call Officer. Officer; Executive Wenzel, the are Synchrony's Brian and Chief On Executive Vice

over now Brian the will call I Doubles. turn to

results, of share, equity good a morning, strength return X.X% highlight [indiscernible] million Synchrony third of Thanks, Kathryn, of on and results the including per average the everyone. earnings diluted and net $X.XX and common XX.X%. return model reported These on Today's of economic Synchrony's strong tangible quarter a business our or cycles. of $XXX assets resiliency through

Our diversified results to in advanced capabilities strong continue environment. ever-changing enabled product Synchrony suite and an consistently to deliver digital

of they of providers the increasingly We choice everyday seek are retailers, partner center customers' alike greater merchants experiences. enhanced and best-in-class needs, utility and and value, as financing at for position the as

in million active by X.X X%. new opened We third accounts average grew quarter accounts and the

programs performance. grew Pet purchase and spend to [ by value, purchase newer growth X% volume to representing several drive resonate retailer active with higher as [indiscernible] continue and was last with This billion third Health to the prior reflecting and $XX a X% versus volume momentum broad-based average by ] continue volume our a reflecting in power record is growth accounts growth year. diversified purchase in XX% led our strong Dental, testament and grew of the driven a The We & portfolio. our year, consumers increase compared Cosmetics. in digital X%, to purchase volume, active growth out-of-partner of of Wellness accounts quarter

average lumber And of last Home specialty electronics and X%, purchase and impact [indiscernible]. remained by & in and and generally the versus the traffic in increased outdoor offset values gas furniture lower volume home transaction lower purchase flat was in products, network auto and reflecting retail and growth Auto, volume growth as commercial year in Lifestyle luxury.

[indiscernible] quarter value total as purchase volume continued of platforms of customer cards the Through our of of newer continue behavior and accounted the pre-pandemic we propositions drive levels. range in a into XX% greater increased see monitoring, products consumer. of our trends the us Synchrony's gives and to for unique normalizing view to XX% health several engagement.

Across stabilization portfolio, average quarter. quarter Meanwhile, transaction off values average modestly in showed transaction climbed year, towards the the had of end throughout leveled which after the the quarter. signs through of the frequency, some declining second the

higher in driving home our is growth, expectations spend, our at normalization in interest we portfolio selective furnishings Looking purchases, larger in are are spending payment with which slowing growth on the less across more partners trends and including auto electronics balances, see with becoming making and and line income. Directionally, our customers that rates broad spend travel. net

deposit the track, XXXX. in in savings we approximately external the While balances level consumer remain average data X% above

summary, reverting trends norms. from that these continues towards while payment labor gradually strong to historical and In show a consumer spend market a benefit

[indiscernible] value As Synchrony. consumer, of consumers that deploy to to compelling propositions continue and the closely also we develop health the attract the partners and we monitor

to month this customers. enhancement and [indiscernible] ] PayPal digital in our Wallet, representing Apple provisioned increasing We announced that earlier we now our can both [ be demo as cards the evolve of the the latest demands meet

year-to-date wallet even use wallets enhancement [Audio a consumers card been digital propositions Active on more greater and a which long utility over users began our that taking through of wallets [indiscernible] loyalty options, broaden [indiscernible] in and retailers with for build time, we've financing and dual technological is drive journey leading valued accumulate Synchrony's these engagement This to our over functionality trend customers to rewards further strategies value. out-of-partner than XX% Increasingly, Gap] and enable everyday value as XX%. be tools and value. are in-store sales both even make are our the simple products and Over purchases, are store. which have [indiscernible] up enable extend extract

deliver tailored in solutions impact clear. digital integrated, our services and broad functionality, to customers utility our best-in-class our products us our experiences When enhanced allow is meet requires strategy technology combine demand. of Synchrony's utility seamlessly investments with this wallet the to and the and

[indiscernible] Our the as utility up XX% our partner year. double much last continued spend expanded and over product compared More average. digital on users have spend transactions in results. impact this outsized nearly to twice Auto wallet the quarter, of its growth broadly,

and our engage for demand to with opportunities We our brands. suite solution continue to favorite reach of consumer shopping and new secure and customers their for fast extend the develop products meeting opening

& to access veterinary were tools to Wellness, XX% financing with hospitals public the at for all expanding flexible additional The addition provider of compelling continually hospitals accepted universities. on evolving pleased veterinary many our X that and is Health announce as supported In CareCredit of to as nation's XX,XXX university to more care continues of lifetime pets. choice of we partnerships than position value for our deliver a locations, we at the now enable experiences power partner powered innovation, Synchrony model, focus by Synchrony's stakeholders. technological digitally in

Brian. turn And to the call over I'll with that,

decrease rate sales in basis and and volume. X% grew our year in customers growth approximately risk continue propositions results to morning, platforms. broad-based and the suite consistent year, last reflected receivables our model across with versus financial XX-plus million the purchase product Brian. The [indiscernible] our returns. our Thanks, to loan XX% last of demonstrate growth versus XXX quarter resonate from benefiting everyone. strength compelling payment of our drove broad Synchrony's Good deducted point strong growth third of value combination

Gap] Our third quarter [Audio

our XX.X%, Was approximately still XXX points Gap] historical [Audio higher than remains basis X-year pre-pandemic

Gap] billion [Audio $X.X to

by points more -- net XXX and the basis yields yield mix loan margin. additional XX to offset than interest were points more net interest-bearing the offset XXX margin. an and asset by points. than points and points prior margin contributed contributed gains year liability Higher [indiscernible] These yield ] basis basis costs points receivables of higher grew benefit as XXX which portfolio funding increased liquidity favorable reduced higher XX costs, interest to physically, basis interest higher [ basis net to

million year, third the the $XXX million decline higher of from net charge-offs, interest quarter reflecting prior $X loan in offset X.XX% higher a or of income. average receivables, RSAs net partially by

our alignment environment continue the They stability RSAs to Our support as we perform returns. greater together as provide critical a navigate designed. our with in evolving partners and

billion, billion, losses items charge-offs X% as grew a well for growth-related increased driven by the credit receivables. loan to build, the in losses. $X.X technology million Provision expenses and as operational growth reserve higher and reflecting reflected $XXX which Other largely net investments $X.X primarily to

XX.X%. Our third to quarter improved efficiency by XXX ratio for approximately compared year the to last points basis

Synchrony equity on our and Summarizing of $XXX million share, tangible earnings generated or average per results, of XX.X%. diluted return $X.XX a common return financial net of X.X% assets on

[indiscernible] our I'll X. cover Next, Slide on

Our XX-plus delinquency third and delinquency quarter reflect to prepaid XX-plus continued towards XXXX the with rates normalization levels. both performance in approaching the net behavior

delinquency rate points year lower approximately last was XX-plus XXXX. X.XX% quarter compared to X.XX% than of Our and third X basis

in versus basis third X.XX% XXXX. and Our our XX-plus lower approximately point the delinquency year prior quarter than was X X.XX% and rate

last platform more midpoint our X% benefited Our path year. investments from performance targets. where net the X.XX% target of we versus our underwriting X.X% Overall, basis continue points returns rate in within of credit was underwriting X%, our below approximately Synchrony are charge-off XXX expect has expectations on to our long-term remains our and optimized. as advanced operating remains towards our fully to a risk-adjusted

those line they more recent to vintages, on with in continue Focusing from perform our XXXX.

implemented While and business we're pleased are beyond. how continuously some XXXX credit origination and of are include criteria. position our these to have These intended we're developing, our with tightening further portfolio [indiscernible] proactive our for refinements actions monitoring

reserves. to Moving

as quarter of growth. receivables was percent quarter. in losses [indiscernible] X build million largely was XX.XX% in by basis of loan a The driven from up reserve the points the $XXX Our receivables second XX.XX%

Turning XX. Slide to

our Our to and be quarter, both deposits well anticipated broker customers In XX% we to deposits and strong of growth, X% the our capital unsecured as comprised any as position offerings securitized of We in our securitized environment. and of our consumer both respectively. the billion funding, end. quarter of our for funding be we'll direct continue stable continue to continue funding attractive funding fund markets at $X third conditions liquidity quarter, of and represented remainder and in issuance X% total The a Synchrony grew at debt model to active bank and completed receivables allow. stack is management to

$XXX XXX loan basis quarter from million points was assets total Total At receivables year represented end, XX.X% our down fund liquidity year. undrawn last portfolio credit including manage as we and billion, from $XX.X liquidity, of last up strong growth. facilities, liquidity

capital our to Moving on ratios.

by points issued a CECL take XX XX in the adjustment income As banking balance basis January continue annual its January, we the Synchrony Federal and approximately the rules to in made to agencies. basis benefit transition The [indiscernible] Joint already impact sheet. of of points each approximately our elected we'll adjustments year reminder, make until of recognized annual CECL statement been has of XXXX. of

Under quarter entered CETX the CECL transition with of Gap] XX.X% [Audio a third we rules, the ratio

ratio lower last compared total points to to year's The basis rules XX.X%. capital year. than last XX.X% the decreased under level XX% CECL of XXX transition points

reserves XX.X% and plus on phased-in last capital to a decreased basis X year. Tier ratio compared XX.X% to The fully

And and authorization. of consisting third end the at repurchase to returned repurchases of remaining quarter, our had the quarter, dividends. shareholders, we $XXX of we During million $XXX $XXX share stock million our million in of million common $XXX the share

guided market restrictions capital Synchrony to to well to return positioned subject performance, our and conditions, plan. business shareholders regulatory our capital by as

seek allow. opportunities structure issuance through We development to stock of our will the preferred conditions complete as to continue of also the additional capital

Now outlook please XXXX. for [indiscernible] an on detail

combined ending volume impact grow year, We XX% slowing purchase receivables growth. versus last to rate approximately payment expect reflecting our loan of moderation and the

addition benefited growth interest a payment moderation XX.XX%. betas. and margin deposit expect net of receivables strong lower full margin interest approximately third fees and quarter Net rate from and We in year to in the interest in

prefund the In and interest-earning expect and receivables movement liquidity driven to the rising competition impacting impacted deposit interest offset quarter, loan of be reversals. fourth average higher mix interest partially benchmark to and by seasonal rates higher by betas fee growth we margin in by growth, assets, net

delinquencies file this point. From end, from quarter seasonal should a credit and levels trends standpoint, reached XXXX at nearly

], XXXX loss on And net visibility approximately to we basis X.XX% level normalized increased to performance into annual for and fully this between we in with the X% noted, a continue With anticipate XXXX. tightening beyond. continue X.X% portfolio are and position [ rate to delinquency as we our and rate our will the an reaching we forecasted charge-off year, monitor

of growth. expect improved And This operating year. continued We outlook the growth, outlook receivables lower approximately of to we the approximately normalization, margin our end maintaining X.XX% prior average the loan the generate be are the and $X.XX reflects loan expectation as low and Gap] higher-than-anticipated of expenses full the mix for quarter [Audio at our per RSA trend receivables for credit net interest at our of we billion impacts

and management on credit term. long [indiscernible] market-leading our our stable returns we our and we're funding execute the while priorities key strategic to confident model, over deliver ability in

back now turn closing I'll call thoughts. Brian the for over to his

Brian. do many the stakeholders by continues on not. We consistency agility those monitoring the business, for focused and control, demonstrate differentiated outcomes our preparing both Thanks, which optimizing closely and and our we managing of model. our remain to the drivers which Synchrony we intently of for

through We are risk-adjusted margins appropriate deliver to growth conditions. market prioritizing sustainable changing

and digital long-term prudently [indiscernible] business. commitments ready environment the as for so are able drive are and future are of continued we growth long-term to of the our ability our consumers, increasingly exceed the to investing we ensure into delivering business value our future. on to evolving an financial even in the the we We

the call to open the to back turn I'll that, Q&A. Kathryn With

That concludes our prepared remarks.

Investor now call. available will Q&A be the Instructions] questions, you If will session. additional after [Operator Relations the team We begin have the

start please session. Q&A Operator, the

with question Nash first [Operator Sachs. Goldman We our take Instructions] will from Ryan

question a Maybe on credit. X-part

-- performance can you a implies the in fourth year quarter. First, in decent charge-off the full guide acceleration

you maybe just So what's talk can about driving that? a bit little

pieces, some that maybe ] Growth inflation, a resumption 'XX obviously, follow, tightening but we're given out [ loan done. the obviously from patterns confidence of Math gives the you that, have given more going student of of impacts 'XX the underwriting of from second, you And offsetting conservative guys then were what here moving that payments. have to handful And one seasonal we tease you and just in then

of walk through means maybe and moving those the you what you trajectory think just can pieces all it So losses? of for credit

to all questions, Sure. I'll get Ryan. try to embedded those

think the if you $X XX-plus how the first bucket, I the delinquency value, I look you rolls, factor in one, delinquency really at XXXX. the think fourth the so you get So as about good quarter, a And look has fourth mean period. sitting still at what we of the and you below our billion consistent little go a dollar over back you really say have the entry from see made performance what quarter. is I'd delinquency into pandemic here of pretty sense a throughout is it rate

So XXXX, collections little stuff it's than XXXX, a back lower roll tougher bit the in. that does which it's -- makes on

I how that's So think quarter. the fourth about

to [indiscernible] box, didn't how partners. right? open performs get When one, and in about to and around really and accordion think XXXX you of number hit back credit start the on a we we So close say, handful our come we things

for was when some we lost shrink was degree, the did And much. to the not not make as consistent. everyone up We'd much underwriting the pandemic, our to as So of in part trying vintages. early expand

throughout So one. kept we consistent period, of number that kind

underwriting and hopefully, choices use score data our us Number pandemic think, our we good the Prism two, from line during choices Advanced we made period. or to very good tools that partners, allows

When the the I period, at performing of with vintages. then they're line 'XX we data, 'XX, the at Ryan, the that vintages still generally look put look pandemic in on I in some

not data, other of than seeing when better Even deterioration. vintages we externally, see performing ] the we're TransUnion look we're So [ the folks. we

do was fact a with and think Ryan, have tools the some the feel shared here again, we have comfortable did that around comfortable and performance. quarter, consumer. So with That in the we take the place I actions we're we said, that in mainly we

other So choices maybe to who can through us. made people underwriting certain flow have

ensure we so, our took optimize we ensure one. want in try really stays to that or loss our that and make rate And sure [indiscernible] to to and risk-adjusted within stay range, in targeted our we our order actions target

in for continued for initially better Got be coming guidance losses forecasted, a given on a year. [ had been forward, million loan are and a to $XXX [indiscernible] seems growth it. And look Maybe as the ] the than we slowing. normalization

we was So, where out Gap] as of some XXXX coming in It back can the you head just in maybe kind similar environment time into pieces an we're below [Audio in to like 'XX? we frame XXXX, tease moving were of the feels well

Losses a couple upon were the and impact little charge-off faster. going then And low a level. of consistently. RSAs you're by most an higher of in interest-bearing And the factors. track sub-X. we're should [indiscernible] bit growth influence percentage other One, the to it depending But have extremely now environment funds can but back driven today. going rate it of that's into again, rates some portfolios cost maybe their a again, again, impact, [indiscernible] certainly it. And will it's is that of have -- of

about I this [Audio always to we've it talked point Gap] Brian,

we is expect and to so again, -- way -- it it we the continue has. to operate historically

with UBS. Erika We'll take our question Najarian from next

My is first margin. question net of direction interest on the

longer to cuts, in out, environment? a of the costs fully and how the relative when other forward interest net of So for the for we in on And sensitive we funding get side keeps should margin how hire your we about about it cycle, should that rate cuts think [indiscernible] think pushing although higher your curve funds? Fed to costs funding eventually we notion think about solidified How longer perform we've the like as seems should

Erika. Thanks, Yes.

there's quarter. about the a So on here think That still I as fourth forward we little go through as tailwind flows prime margin in book to move the we think of the rate. here, bit

pandemic paying see period. We're coming you're above margin thing on to to still basis benefit think are going points rates that I higher from the XXX a the second revolve. continue the

should bit there a reversals be little should of headwind again, there. that go some a against There that. to be relative So

that's think of So equation. really, the as yield I about side the

year, to are On year. liabilities of deposits that there -- on a of the side interest-bearing put me, assets next they're read lot Again, excuse this the on that going were lot to put were a have equation, of

of as those interest-bearing days year So up bit [indiscernible] tick in next the hopefully a liabilities little renew. shorter

that that's be get little going when for their slower case side the be right? up. and of of get to backside try are of want portfolio or that deposits try some down made will think There's to I base fund yield where want There push of bit to seen, to is gather a cycle, to that investment are sensitive. to cost some to be can the the the down folks NIM betas really the you a coming

I get as you to So think of we perspective way which better turn. that, we a will give probably that closer can

a on the question to lot companies Got card regards numerator the timing we commitments of unfunded it. with ACL in been my how is ratios particular of for of terms should and capital. terms differences in There's treat second higher deductions. in And discussion also

could bit how so capital give pending you're the preview, little capital could approach impact to expecting new impact to a you management? how your rules that So And us to Synchrony? of a speak, on

Erika. question, great Yes,

when look say, proposed thing plating. fully through disappointed through You right? don't probably what the went I as of capital, a combine rules, others, the Fed from along capital that around we I as thought some think, clearly with a for the whole. well certain review the you we industry rules at that both with the think It's process clearly we're say would stack, the very So if in apparent thought gold elements difficult, the I'd holistic first as we're with which about

regard treating to seeing about a think feedback. as through level seeing lot the governors that the group that. the concern And rules some tailoring with level even of to And that in on the details, we're then I have you're same trade by there's think think of I disappointed I feedback, other And it think the before when get bank's Fed you're I the been effectively banking institutions. eliminated clearly us finally, you Synchrony with

of if probably XX% said, us we to are. they the add not impact the sure about to fairly taking you pieces and higher With is at the you there as those significant The the just rules that RSA operational is as looked think that that capital. again, to I they of range to we're XX% offset, fraud the Erika, when commitments, the they the will between really some are, When depends impact risk stay how unfunded And RSA found treat upon revenue the back items. some with a the RWA.

The I we mitigation strategy, where a unfunded good commitments, news and an very of be manageable. active think for us, have today. through it, It's that think the about accounts would good active. we is are deemed And of part with think a this path it the was way that we bulk

So impacting current line without our business. in can adjust we customers strategies

we So aspect believe I'm talk a as we is look with the not sure it there we company, manage how at the growth side a and we as about of significant business.

next We'll question Sanjay Sakhrani take from with our KBW.

are they little I the the of to adjustments comfortable card in at Maybe inflation risks methodology this rate trending the going point? terms not. fact talk Wenzel the is first issuers of we've you have of feel make that in migration guess past. for rate the about bit could of reserve the going different kind behaviorally you and just Brian associated in forward and than things some a and some And what's you forward. there's question, seen inside my with reserve [indiscernible] what's

for the end we question, Sanjay. Thanks level Obviously, have we that losses. of the quarter the right the third feel comfortable Yes. at of

that didn't model we the think really you assumptions have about it, As reserve change. the in base

at the when there, think significant in look underlying model. that I a are the are out there's into not assumptions you baselines going that the shift

hopefully bit shift looked see a part also you portion as little as for between [indiscernible] we the we the of loans scenarios and As inflation that We it. have we've student that what potentially of quarter, is did the part have quantitative think captured history. worsening through run, then accounted of we that model, macro. the at We of a past

changes are as feel So that in good we and about we today the we where environment. can sit macro withstand we

when between a of read I at third X look there wouldn't That into it, points closed that and we it we basis we that said, models deteriorating isn't have are second significant, the picture quarter these quarter, as quarter. coverage given

one And acquisitions, sort renewals talk Okay. about maybe Great. for of then Brian can of then portfolio general? the just in And stuff? the for competitive that Brian, backdrop kind Doubles. environment any maybe just you

Yes. Sure, Sanjay.

generally, say, environment. it's constructive So look, I competitive pretty would a

I a more tend into the seeing think, some opportunities, disciplined. in you the think time I what stay on a to renewals period news there's right And bit disciplined, any us. and market like pricing now more horizon issuers around in new is we're see which enter we're pretty you a good where conservative for is little uncertainty little

a In renewal terms announced quarter. renewals, us [indiscernible] this we Belk for of great quarter. normal of just kind

And obviously, always pipeline we're so portfolio. out the there on renewal working our

opportunities, of And less would new say, kind terms the new it's of balance, in on probably I start-up program program. opportunities, then big of more opportunities,

I the XX that next And XX be for I some you'll come that, market. hold true and then up think will the months. programs see probably in think bigger beyond to probably

We'll take Hecht Jefferies. next John from with our question

I and of are the ago? kind new the sources few you're accounts customers as I'm then new well? given what new quarters. of And underwriting last [indiscernible] risks the of customers mean, the few years wondering, where for what a

as say accounts the of I well of on where John, magnitude from. coming kind in consistent Yes. absolute trends terms as both would are new accounts,

more not a things And accounts, terms new we et of both means cetera. One trend of active really of that try in really think times, we credit it in steady uncertain times. in box accounts, restrict good as about that we the the to underwriting, we Brian expand that have mentioned more and don't

we really launched the programs I well. growth recently We're or new really seeing there. that performed would tell that good you

really be good would to encouraged trends So we the platforms. that I across of continue front. say, seeing, on And all you're

really outperforming. platform at growth, look As it's that's not one we

pretty that's that & encouraging. little and Health with it's Wellness, a seeing but You're broad-based, bit

to us the volume, the consumer look accounts. anticipated you of than been much active a any more has them resilient of accounts, metric, whether that more because part one more a and big you're Gap] keeping accounts seeing new engaged one probably than pick across than think our [Audio little had important product, we consumer ago, that's that's board, a a receivables, year that that's If bit new I offering at like purchase

I'm us -- of that position assume you little And what's environment through then take bit you're go could looking wondering might kind I [indiscernible] what just from the would if a better? at and you where perspective?

I against we're around it sure comes accretive. opportunistic disciplined to when Yes. time, same return John, weigh opportunities. and back -- extremely opportunities, of the that financial but We stock other look, always mean, that we're our at they're buying those the making

some nice market. And couple of we [Audio an over absolute years. smaller we're so home done in the We've [indiscernible] Gap] really look, always for has been the us acquisitions last run since

wellness leverage the and the able new to of been picked but for of outlay of products some grow that. scale that, part health terms we've in to up as that. capital We

So those Gap] the [Audio are

sense to and that and to uses our return with at profile EPS a good make look accretion. said, [indiscernible] larger to for a but but for got us they've path capital, opportunities, have nice they've we got

Piper next from We'll take with Barker Sandler. our question Kevin

payment net consumer? changes you for rates [indiscernible] even prime any savings that little to you a worth primarily weakness shifts Have Are in of seen in to near seeing household competitors rates there's mentioned there? particular or rates due the cohort? that prime some bit your payment within any more

Yes, Kevin.

on consumer, to subprime, The -- increase that's level lot focus say when bolstered excess have the But XX.X% into savings in benefited there's first period. wage there. a [indiscernible]. right savings end rate, cohorts think kind thing that we do of that this they goes I'd the in prime higher And by the through about a of the consumer [indiscernible]

is I which them see biggest bucket. the but at little they were is in -- rate [indiscernible], look probably compare shift full bit that biggest [indiscernible] shift that isn't in in payment right? pre-pandemic where necessarily the year-over-year, the A that the the payment rates period. and more in When above You

something concerned at about it not [indiscernible] beacons to find say I'd are So we point. that this be or

I very And know payment it's I for first... it's then [indiscernible] trend know Okay. [indiscernible] rate on

Just so we actually [Audio Gap]

loan X beginning in payments There's October.

very when cohorts looked you, So I'd entire and book with with that's so a find this how to They at did be against you're credit to are at its for Kevin, We regard those better we loans. performing honest really accounts against, going that. time performing us [indiscernible] with actually people good say, to dive they interesting. the are

So they [indiscernible] very cautious.

Gap] [Audio

pick number people due up give payments prior to date. of the did

again, a bit [Audio So going is fourth quarter going we the forward is that expect what be little to Gap]

to so you with regard [indiscernible], the you'll into first start as then people move who may et and cetera, quarter.

we is be be challenging fact -- them going 'XX. that expect What's to the not they're the for don't issuers to reported to bureaus January until

balances work we of those that through whether with down. to in not can paying and the and how see bureaus, not when regard they watch we're the payments or changes things resuming going So they're there much to are are detect

the in may of struggle. population. ones up them for provided kind in we So that periods that set we've to we think monitor for prior advance Again,

We'll Stanley. take with Adelson Morgan our from Jeff question

to the get from CFPB wanted wanted the I -- here. to almost updated an see Just just late yet. and view done fees know heard on I anything with haven't we're October

preparation? fully any courts? in there as going part you wondering, I dialogue in are that the question, any you actions approach still the of taking proactive, in just rule preemptive of the be the to the And it out guess more going you plays are sort to wait-and-see there? comes proposed? expecting out Or and rules shift Just as a be see Or out, how come to wait to when been are in has out

Yes. Thanks, Jeff.

for look, the rule final issued. to So still be we're waiting obviously

implementation So got the final see like unknowns until out the the there period, there's final We we plenty rule. see to of things amount.

litigated. believe also will be that We

going timing watch to and impact as the that So that could we're carefully, well.

here months So now. partners with I been we've for very of pricing We're of on we the -- position a large what timing. putting us offsetting impact scenarios the partners cross-section we today. really our with I can working prepared do look, guess in the goal we're underwrite been in would our with X that for customers a working We've offsets say where closely and multiple over of terms is,

it goes to we unintended important obviously that a saying properly we're in rule. are evaluated. disappointed We're incentive Late weren't pay [Audio Obviously, Gap] very consequences without think has fees the

an change past. interest said just to pretty clearly in no not is a what significant of the consumers. cross-section to we And

to [Audio Gap] offset Our fully goal our is partners, the and continue impact to protect

and right approve majority that we today. the of the do customers

Gap] the side [Audio credit on tightening Just

time, hard you weren't as it your meeting the peers. At same as

wondering what Just Gap] would [Audio

out there that be sort around any to or timing of expecting?

Gap] [Audio

team have credit a that's Gap] we by I very Yes, a partner And we evaluating consistently share [Audio [indiscernible], degree, about think some talked channel. I to want by vertical, good

the box consistency our that want because credit origination. partners in around move often

customers our have of And consistent to line us. Our from that's strategy. underwriting lower low growth want part and

with John to next move We'll ISI. Evercore Pancari

the able -- little at late the on back the that that time think a your should some bit the could negotiating And of initial pricing. [indiscernible] can offsets to of factors. how of just you're of with there's talk Maybe impact? offset Regarding type you're to timing the timing terms about to you I'm other expect in that assuming mentioned of being us maybe you about just this give we fees, partners, if color you what you see

Yes.

the Gap] effect, final as rule any mean, goes implementation still there's primarily, and as look, obviously, a that's well of into period impact those XX when rule. to I original not the So The litigation the the clearly nature longer than [indiscernible] with the are days, enough this revisions get that's just time having was [indiscernible] we're that the [Audio of that. And written

take, written. actions rule goes final that if is effect going into we're the to

second is my as business is versus the then Can sector that Wellness what other separately [indiscernible] RSA? previously, third RSAs what's heavy quarter about question you've a in or not then you areas been are Okay. doing may And talk and in lower lower product have also & Health then the line.

Yes.

different originations, took, actions lot cutoffs but it So what much regard it of to differently not around originations. is. a as with credit around in the account we as score than factor we necessarily is

type account working management action. are also We on

of bureaus form a watch the where account. attributes or from So line to closed we or a certain turn criterias [indiscernible] triggers or that would decrease in come a

the criteria cutoff. are So are coming It's management underwriting really into not those it. necessarily flavors of in on different account it's focusing Again, shift that X engine. a our

second the we question Wellness. sales particular highlight before, on And a think it that we I lot your part RSA, to platform. & regard said sitting With in RSA the not Health of of just there's

Gap] [Audio

We'll Mihir take Bank our with question next Bhatia of America. from

credit. with start to back -- wanted the discussion to going I around just

couple back We've that implies, think, credit tightened. but to Your a you've had fast for XQ to gets the to on is think the X.X%, pretty underwriting some evolving? of Do seen year. normalization the long-term over pretty ] before you keeping X% it the above which here of target. coming pretty you've in you for was last I also this bit half guidance you how getting your [ your full kind year down the of I strong gear talked I from steady, see curious close know a about little X.X% back years? back back target in a XXXX

I'd X say, not enough delinquency but again, it's I reached and know got one, think we at we've reached I still as first and we company the thing Well, metrics. a don't credit -- basis for have haven't points our still Mihir. Yes, pre-pandemic it

couple are think issuers in of that I that there's category. only a

think -- I shouldn't one. that I number undersell we wouldn't So

I think, characterize when at look accelerating not the performance, the would quarter. fourth number sure two, you in I'm it I

basis, a XX-plus a growth at basis. on then grew in the and and If grew a on 'XX, XX% XX-plus the XX% versus XX% 'XX XX% you in 'XX, 'XX to go average they this quarter, we this, back average and in on on look dollar

say, ]. if in XX I'd look line you with, when [indiscernible] think of [ with seasonality XX bit percentages, they and bps, a at XX relative the you little and So and XX or XX probably about were overlending

So a there characterize big I'd sit that there's deterioration, it say you not way. and

to basis, the share there year As trying to losses tightened X.X% performance charge-offs a we perform company. full given effective sending not why as reasons lower of willing net for of year I a one we the we're look X% portfolio bit know and it to at next to here, where the well risk-adjusted consumers, think It's I again, for higher that little as the think us. inside deploy for optimized we've maintain are That's us that they're net we this is where capital. thinking margin as now clearly want take that's others to and company because margin. rate a a operate not a and charge-off the

going be to disciplined we're So that. around

the of that, other some of comfort talked call, good seen the us that if you at trajectory. gives level to that of earlier in So again, have a some view vintage go we've things look about I performance and when pretty we back that and the I

for I at not then Obviously ask Got just little XX months Synchrony gears as you've But offering offering calling maybe are you a of rolled a Pay, ago. switching lower basically exclusive it's I about it. the recently. there It today looks quarter think And or the bit. it topical Lowe's. very as out space. wanted or completely this XX maybe to BNPL the BNPL white the and they're like provider label, which

was if bit. just you on little I expand So a that could wondering

talk about retailers? looking look about competitive in an area Just some like? your card are Is expand the out do you're offering what thinking this Is this tied it other that with and way? a How you process? build Is to product? to economics

sure. Yes,

more maybe So start to broadly.

we I think this our has partners. area been with been an investing where

great new nice just way a later customers products really really offer offer and a that's them It's more I offer. utility. we financing got think pay engage that to the

proof partners. seeing that to us are and product We does our the value both provide to

pay quarter, XX%. products at we've year-over-year, look results and grown you this later installment the If

over-indexing clearly that product. So we're in

So feel good. we can pretty

and over for label that pay multiproduct announced and that is is that. the think we of talking well I with been starting launched about you're version a now to strategy year Lowe's. what pay white a off, seeing lowest we've The with

flexibility the the consumer partners so things of our product to the both important of strategy but flexibility really terms to of And is in offer we inside our that's how one as well.

as a So of lot number lot are not Synchrony that to do a of pay which a us white I later, because real to of it, we're competitors for willing also a do to for that. partners. we willing or partners think willing advantage and competitive label We're offer that is

far, and be we're offer our really good seeing to of really another inside pleased able We're Lowe's to product on traction just partnership [Audio launch the so Gap]

feel in do terms on of the lower and other the end you versus end the going more on forward? or what one comfortable you're seeing based also, higher

Yes.

So.

credit metrics, when obviously the at payment So you I metrics. and metrics the think spending metrics, then the the look

credit delinquency. start deeper consumer is first. in is pre-pandemic back and That the more a of one little who with me their bit to then And levels a performing little see performance to bit worse. Let trying those and nonprime delinquency

and cure a other credit it they that's and like standpoint, are out So of settlements from forms certainly [Audio a using into get Gap]

that's don't liquidity. kind just they access size only of companies to environment, in have as order to much

Again, what's has keeping wage base that that helped consumer increase that. fuel going

to even they wage that the though So have dollars spent may the they got stimulus pandemic, gains.

and Again, balance at book, again, I up book. we continuing pace. the expand think look manageable our to we in they're that, look and average very when our at [indiscernible] So a

in point for bit more and CAGR a more there is the little it's Now it open buys up system liquidity of up and them. X% a

incredibly performance. high consumer, performing are we skewed in has look which points is XXXX when the strength. above the payment helped showing remain also the high-end levels. They at percentage end, well. high-end Their portfolio consumer Clearly, We've rates the super

portfolio, XXXX. [Audio still our into So is you Gap] below [indiscernible] delinquency

more the talk any quarter improvement look bit really within of and but been we that? it to guide at is the like when and [indiscernible] using look asked a guess RSA else the whatever reason, for at expectations have there. everything is we from you function everything, at and rate looks coming both feel of but we I When like when the just to range second RSA is what But a a mix the NIM, little year Most about charge-off perspective. going at look answered, of bit, from original of that the or perspective contributing kind

player. Gap] mix is these really different. by of arrangements between are It They Each part [Audio are unique the

main that Gap] driver. [Audio the is

From Martinez HSBC. Sau [ ] with

move reserve to levels been asked, have questions you you move higher. get exportable CECL XX, day are, will points on reserve XX as that reserve go seem Gap] losses are we levels. But the comment adequacy think, the you have expecting where and here. just to I I expect and maybe comments period maybe still your can ratios your be forward. about through that the reasonable X indicating flow from with if that you basis feel and But and back would moving above Most then I been you comfortable reserves, NCOs to be on could allowance taking on [Audio your you we will but just higher go normalize

Yes. Thanks for the question.

about think way the So Gap] I would the [Audio

day period, qualitative the forward we trend as piece think, stabilize in towards portfolio, offset we impact ultimately, effectively see down that more come line X an as we generally move down normalization in assumptions as to about. you you'll we have flow move absorbs think the begin it, you'll and delinquencies level. is come and If model the comfortable, that in the through quantitative this then that and get

look a a we a if claims in could have rate ones, of but talking things about probably of may that a -- bigger collection we're think and you do of rate are kind second with you did collection at the lot times it a on deterioration couple claims be incremental performance If we'd X that about driven see. that basis that unemployment mainly that clearly on ones associate factor provisioning here, so factors growth-driven, performance in is of are unplanned

collections seen would that warrant that haven't Again, today. trends we in

remains unemployment claims good So And we [indiscernible] low. historically feel about that.

our plays of deteriorating into macro factored we a of at how have think and end we the see again, out. assessments for the that we'll reserve quality quarter, potentially to third So just

questions time for allotted are we And today.

with Arren So Cyganovich Citi. we question our will take from final

Look the your outlook your came I'll talk you down touch. share be Can about buybacks buybacks quarters [indiscernible] for in ahead? quick. a just

Yes.

guidance in. of million $XXX repurchase we all, of to regard to end At to have get able remaining the we generally had capital year. as Arren, not we next question glad or end we to purchase the the under move flow year how First in current quarter. quarter, of regard their With the authorization do the not were with for we the give of your given share backs, quarterly June out the

about that dollar to is amount. want level with be second driving clear probably the I not really regard What to for a what's

fees. [indiscernible]. clear want environment really for to to then three, just Two, it's any change be I and on Basel in not related the it's related And III to related potential macro that number late one. a to it's not proposals So not us,

set that's mile of more plan how in out a markers income set comes We have in versus of planned. and kind capital RWA based then that our we've the

not the are we other And was purchases. that again, those the factors but factors. consider So

you. this Synchrony's concludes Thank call. conference earnings And

your day. a at disconnect lines may this You wonderful time, you. have and Thank